China reported an annualized growth rate of 7.3%, slightly stronger than 7.2% expected and the same as 7.3% in Q3. Other numbers from Australia’s No. 1 trade partner were also quite solid.
AUD/USD reacted positively, rising nicely from support and stopped only at higher resistance.
Apart from the GDP figure, China also reported a growth rate of 15.7% in Fixed Asset Investment and more importantly a gain of 7.9% in industrial output y/y. There were worries about the economic giant’s output, and especially its desire for Australian metals.
While the price of copper certainly hurts the Aussie, these numbers from China are supportive. Is the data real or not? China is a huge country and it reports final GDP figures well before the US, the UK and Germany report initial estimations.
And is the Chinese government engineering the data to match its political needs? Perhaps, but this doesn’t mean the numbers don’t have an impact on trading.
AUD/USD was trading too close to support at 0.8150 when the pair rebounded quite nicely and eventually hit resistance at 0.8215.
For more, see the AUD/USD forecast.
Here is the chart showing this reaction: